CTA10/S37

Relief for a company’s trading losses against other profits is at CTA10/S37. For other ways of giving relief for losses see CTM04050.

A company can claim to set off trading losses against its total profits:

of the accounting period in which the loss was incurred, and

if the claim requires, to carry back the losses against profits of preceding accounting periods (CTM04510).

So far as possible claims should be made in the company’s CTSA return (CTM90600+). For claims see CTM04580 and for accepting a late claim see CTM04590.

Relief is given against total profits, including chargeable gains. A company cannot choose to restrict the claim to cover only particular items of income or gains.

A claim may be only to set-off losses against profits of a current accounting period, or it may be to set off losses against profits of the current period, and then to carry back any balance of unused losses against profits of preceding accounting periods. A company cannot claim to carry back losses without first setting them off against profits of the current period.

Losses of an earlier accounting period, where these are claimed, are relieved before losses of a later accounting period. There is an example at CTM04550.

See CTM06300+ about the disallowance of trading losses carried back under CTA10/S37 where there has been a change in ownership of a company (CTA10/S673).

See CTM41215 for guidance on the set-off of deficiencies of trade protection associations for earlier years.